The USD/SEK currency pair settled below Friday’s high of 9.7658, its strongest level since May 1st, in the wake of the Federal Reserve’s and Sweden’s Riksbank policy decisions.

The Fed left its federal funds rate target range intact at 4.25%-4.50% for a third straight meeting in May, in line with market consensus.

The US central bank has adopted a wait-and-see approach amid concerns that the tariffs could push inflation higher and slow GDP growth.

At the press conference after the FOMC meeting, Fed Chair Jerome Powell noted it was too early to determine whether inflation or unemployment would emerge as the bigger concern and the central bank did not have to rush into adjusting interest rates.

In the meantime, Sweden’s Riksbank left its key policy rate intact at 2.25% at its May meeting, highlighting increased global uncertainty, especially after a shift in US trade policy.

The global macro environment has led to a slightly weaker Swedish economic outlook compared to March amid decreasing household confidence and early signs of heightening corporate pessimism.

Riksbank’s Executive Board said it was more likely that inflation will ease below the March projection. Back then, policy makers had said they expected inflation would remain above the 2% target for the rest of 2025 before stabilizing near that level in 2026.

Market players are also closely tracking developments in US-China trade relations ahead of high-profile negotiations set for this weekend in Switzerland. US President Trump has suggested that China’s current 145% tariffs could be reduced if talks progress favorably.

The USD/SEK currency pair settled 0.28% lower at 9.6960 on Friday.

The exotic Forex pair gained 0.53% for the week.